Canadian Pacific’s carloads

Canadian Pacific’s (CP) total carloads rose a slight 1% in the week ended February 11, 2017. The company hauled ~30,000 railcars that week, as compared to ~29,500 in the corresponding week of 2016.

CP’s railcars excluding coal rose 2.5% YoY (year-over-year) to settle at more than 25,000 units in the sixth week of 2017, as compared to nearly 25,000 railcars in the week ended February 13, 2016.

Canadian Pacific normally receives 70% of its revenue from Canada and 30% from the United States. CP’s coal carloads rose 15.6% YoY in the fifth week of 2017, whereas rival railroad Canadian National (CNI) reported a YoY fall in the same category.

Why coal carloads matter to CP

Coal accounted for 11% of Canadian Pacific’s (CP) revenue and 12% of its carloads in 2016. The company mainly transports metallurgical coal meant for exports through Metro Vancouver’s port. Its coal traffic in Canada begins primarily at Teck Resources’ (TCK) mines in southeastern British Columbia.

During the past year, coal’s production and demand have been under pressure due to depressed prices, environmental concerns, and a shift from coal-fired power plants to natural gas-based electricity generation. US steel producers’ capacity utilization didn’t see a marked improvement in the recent quarter either.